It appears that cryptocurrency have gained popularity over the past few years. For a good reason: they are a cutting-edge form of money that can be exchanged globally, and those who have invested in them have seen fantastic results.
Even while the price of these cryptocurrencies shot to new heights in 2017 and 2018, making significant profits for those who got in early, particularly those who invested in Bitcoin, there is still a tonne of other cryptocurrencies available, so it’s not too late to invest in them.
1. Significant Success Of Bitcoin
The success of cryptocurrencies’ primary currency, Bitcoin, is the most obvious argument in favour of investing in them. Bitcoin is a good investment since it has made many individuals extremely wealthy, and its value will likely continue to rise.
A graph depicting bitcoin’s price history initially appears to be somewhat random. However, in the grand scheme of things, bitcoin has been rising since late 2012, when it was only worth about $10 per coin. Several factors could limit or stop bitcoin’s growth, so the trend may not last forever, but it’s hard to say there is a better investment opportunity available now than cryptocurrencies.
2. Potential Returns
In crypto, the word “potential” can be interpreted in two different ways. First, cryptocurrency has great potential because it’s a relatively new idea. This provides access to countless opportunities for the future.
For example, there is a greater likelihood that Ether (ETH) coin may appreciate significantly if a leading non-crypto firm adopts the technology linked with a cryptocurrency in the mainstream.
Due to the potential future rewards, this may be an opportunity for early investors. The finest illustration of how widespread usage can drive up the cost of a cryptocurrency is Bitcoin.
3.No Risk From Inflation
A government or bank cannot arbitrarily manipulate cryptocurrency. Furthermore, this implies that the speed at which a fiat currency depreciates over time exceeds the potential return on investment offered by cryptocurrencies.
However, this does not mean that cryptocurrencies are immune to inflation. Theoretically, if more cryptocurrencies are mined, their value will depreciate, but safeguards are in place to prevent this.
Bitcoin is the most prominent example. Every four years, the rate of bitcoin mining is cut in half. It is understood that this has two huge consequences. One, the level of scarcity does not change, and two, the inflation rate is relatively low.
4. Inexpensive Transaction Costs
Compared to other financial services, cryptocurrency transactions are comparatively inexpensive. For example, a domestic wire transfer typically costs $25 to $30. Even more, money can be spent when sending money abroad.
Transactions using cryptocurrencies are typically cheaper. You should know that the blockchain’s demand may increase transaction costs. Even on the busiest blockchains, median transaction fees are still less than wire transfer expenses.
Cryptocurrency transactions allow you to keep privacy because you don’t need to open an account at a financial institution. Transactions are pseudonymous, meaning that while your wallet address serves as an identifier for people on the blockchain, it doesn’t include personal data about you.
In many situations, having this much privacy may be advantageous. However, once a wallet address is associated with an identity, the whole transaction history becomes visible. To increase the privacy of cryptocurrencies, there are numerous approaches to hide transactions and many privacy-focused coins further.